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SPS. CRISTINO v. METROPOLITAN BANK

FACTS:

The petitioners filed a complaint for damages against the respondent bank, alleging that they had experienced emotional shock, mental anguish, public ridicule, humiliation, insults, and embarrassment during their trip to Thailand because the bank had released to them counterfeit US$100 bills. They claimed that they had withdrawn US$1,000 in US$100 notes from their dollar account at the respondent's branch, and while in Bangkok, they exchanged five US$100 bills into Baht. However, one of the bills was rejected as "no good" and confiscated by a bank teller. They also alleged that they had bought jewelry using four remaining US$100 bills, but the shop owner later discovered that the bills were counterfeit and confronted them in public. The petitioners demanded moral and exemplary damages from the bank.

The respondent bank asserted that it had exercised the diligence required in dealing with foreign currency notes, and that it could not guarantee the genuineness of every note that passed through its system. They offered to reinstate US$500 in the petitioners' dollar account and provide an all-expense-paid trip to Hong Kong as compensation, but the petitioners rejected the offer.

The RTC dismissed the complaint for lack of merit and awarded attorney's fees to the respondent. On appeal, the CA affirmed the dismissal but deleted the attorney's fees award. The petitioners appealed to the Supreme Court, arguing that the respondent bank was liable for misrepresentation and bad faith.

ISSUES:

  1. Whether the respondent bank is liable for misrepresentation and bad faith.

  2. Whether the respondent bank is liable for gross negligence, misrepresentation, and bad faith amounting to fraud.

  3. Whether the news clippings showing the deception of "supernotes" by the U.S. Secret Service and Central Intelligence Agency should be given weight.

RULING:

  1. The appeal is partly meritorious. The General Banking Act demands banks to exercise the highest standards of integrity and performance and treat their depositor's accounts with meticulous care. However, the degree of diligence required depends on the circumstances of the case. The petitioners failed to prove that the bank's actions amounted to gross negligence, misrepresentation, or fraud. The bank had offered compensation for the inconvenience the petitioners experienced, but the latter refused it. The Court found that the bank had exercised the diligence required in handling foreign currency notes and in selecting and supervising its employees.

  2. The respondent bank is not liable for gross negligence, misrepresentation, and bad faith amounting to fraud. The General Banking Act of 2000 requires banks to treat the accounts of their depositors with meticulous care, but the degree of diligence required is determined based on the particular circumstances of each case. In this case, the bank's failure to exercise the degree of diligence required does not amount to gross negligence, misrepresentation, or bad faith.

  3. The news clippings showing the deception of "supernotes" by the U.S. Secret Service and Central Intelligence Agency should not be given weight. These news clippings were not based on facts and cannot be relied upon to establish the bank's liability.

PRINCIPLES:

  • Banks are required to treat the accounts of their depositors with meticulous care, but the degree of diligence required is determined based on the particular circumstances of each case.

  • Gross negligence connotes want of care in the performance of one's duties and is characterized by the want of even slight care.

  • News clippings cannot be relied upon as evidence if they are not based on facts.